Seeding of the pairing numbers is recommended when there is a large rating-difference between players (more than 300 points), and there are many players in the same pairing group.
If you select seeding, TS will divide the pairing list into 4 equally large groups ordered by rating. Then, players wil be drawn from part ACDBCABD, and so on until all players have a pairing number. If the number of players isn't a multiple of 4, two extra players are placed in group A and C to give a more fair seeding in the bottom of the list. If the pairing isn't a multiple of 2 either, the lowest ranked player is given the highest pairing number.
Under tournament options you can select which rating-type (national or FIDE rating) is used when ranking the players.
Seeding is only for monrad type pairing systems.